– HC Has Successfully Issued Corporate Bonds Valued at KRW 100 billion
– Planning to Replace High-Interest USD-Denominated Loans with the Newly Issued Bonds
– HC’s Business Performances are Improving, Upgrading its Credit Rating

A gas plant in Qatar, whose stake is partially owned by Hyundai Corporation
[Hyundai Corporation]

 

Hyundai Corporation (HC) has succeeded in raising funds worth KRW 100 billion in corporate bond markets, 67% higher than planned. It is partly because HC’s trading sector, backed by global networks, can find more business opportunities due to conflicts surrounding supply chains. HC has posted record-breaking business results two years in a row, enhancing its credit rating.

According to trading industry sources, HC issued corporate bonds valued at KRW 100 billion as of March 5. It forecasted demand worth KRW 60 billion last month but had no choice but to issue more bonds because KRW 630 billion worth of funds, more than 10 times higher than expected, were attracted. Of them, KRW 50 billion will be spent to repay existing corporate bonds that are about to mature. The remaining KRW 50 billion will be used to replace high-interest dollar-denominated loans and to reduce financial costs.

The financial market has paid keen attention to HC because HC’s trading division has posted impressive business results. The amount of steel and the number of auto parts traded in the Americas and the CIS, HC’s main business areas, have risen sharply. An HC official explained, “The supply chain issue has emerged since 2020, making it possible for trading firms’ global networks and business sector that have been undervalued to produce significant results.”

A rise in trading performance enabled HC to post an operating income of KRW 66 billion in 2022, the highest figure since it was spun off from the HD Hyundai Group (former Hyundai Heavy Industries Group) in 2016. Last year, it recorded an operating profit of KRW 99.6 billion, hitting record highs for two consecutive years.

In particular, Hyundai Corporation has also succeeded in upgrading its credit rating that was downgraded after the spin-off. In June 2023, Korea Investors Service newly awarded an A0 credit rating to HC. Six months later, NICE Investors Service raised HC’s credit rating to A0. Last January, Korea Ratings also upgraded HC’s credit rating to A0. As a result, all of the three major credit rating agencies in Korea have assigned an A0 credit rating to HC.

An HC official said, “Since the spin-off, HC has maintained close ties with existing partners including the Hyundai Group as a whole. The spin-off has led HC to enhance its business capabilities and services, as well as its business viability.

 

March 8, 2024
Maeil Business Newspaper